Yorkshire confidence is on the rise

Despite the increase in confidence – calculated as an average of respondents’ expected sales, orders and profits over the next six months – firms are not ​increasing their investment activity.

The net balance of firms looking to grow investment in the next six months fell five points to 10 per cent, compared with January.

​However, the net balance of businesses looking to hire more staff rose by six points to seven per cent during the same period. The share of firms that reported difficulties hiring skilled labour remains relatively high, rising by two points to 40 per cent.

Perhaps in response to the challenges attracting the right talent, a net balance of 23 per cent now expect to increase staff pay during the next six months, an increase of 23 points in the past six months.

The Business in Britain report, now in its 26th year, gathers the views of more than 1,500 UK companies, predominantly small to medium-sized businesses, and tracks a range of performance and confidence measures, weighing up the percentage of firms that are positive in outlook against those that are negative.

Across the UK, business confidence was highest in London (31 per cent), followed by the South East (30 per cent) while the lowest level of confidence was in the East Midlands (14 per cent) and the North West (19 per cent).

Kelly Green, regional director for Yorkshire and the Humber, said: “There is no doubt that businesses are facing challenges at the moment, with Brexit uncertainty and concerns over domestic demand highest among them.

“But confidence has rebounded after falling in January, suggesting that firms are becoming more comfortable with navigating their way through the political and economic fog.

“Despite this, many are taking a cautious approach, scaling down investment with only marginally stronger recruitment plans. While there is a degree to which this may be prudent amid such uncertainty, businesses need to ensure they are not missing out on the opportunities being created amid the current turbulence.”

Brexit uncertainty is now the single greatest risk to firms in Yorkshire in the next six months, cited by 23 per cent of firms in the region.

The proportion of Yorkshire firms reporting economic uncertainty as their greatest risk decreased marginally to 17 per cent from 19 per cent, while those citing weaker UK demand fell from 20 per cent to 15 per cent.

More than a third (35 per cent) of firms in Yorkshire expect a negative impact on their business if no trade agreement is reached with the EU. A fifth (20 per cent) expect a positive impact, while 44 per cent either do not expect any impact or said they didn’t know.